Honda threatens to leave Japan

[LTVibe]

Honda Saying Sayonara to Japan?

Quote:
Well, after slicing and dicing his company's profit forecast, Honda's CEO, Takeo Fukui, has had just about enough. He's asking the government to help weaken the yen--or else:

"If we go beyond (100 yen), we would simply have to transfer more production overseas, cut more temporary workers and even start laying off permanent jobs," he said.

"Beyond that we could switch to importing more cars into Japan, bring research and development facilities overseas, and in an extreme scenario move our headquarters offshore. It would cause nothing short of a hollowing out of Japanese industry."

 

[digitalSniperX1]

IIRC, they've considered moving to the US once before...

 

[Steve S]

Cheaper in China.

 

[digitalSniperX1]

Not for long.

 

[ToyotaNSaturn]

We never hear about Mongolia or places in Africa in such situations. The cost of living there isn't high at all.

 

[digitalSniperX1]

Africa might be on the list if the region wasn't rife with political/social instability.

 

[VeeDubb]

Originally Posted By: LTVibe



Quote:
Well, after slicing and dicing his company's profit forecast, Honda's CEO, Takeo Fukui, has had just about enough. He's asking the government to help weaken the yen--or else:

"If we go beyond (100 yen), we would simply have to transfer more production overseas, cut more temporary workers and even start laying off permanent jobs," he said.

"Beyond that we could switch to importing more cars into Japan, bring research and development facilities overseas, and in an extreme scenario move our headquarters offshore. It would cause nothing short of a hollowing out of Japanese industry."

Note to Gary: See, another example of a power broker getting ready to screw his own people even in the absence of conspiracies. Why? Because Fukui knows that the big pay day isn't going to come from keeping Japanese workers employed - its going to come when he beats quarterly earnings estimates and Honda shares go up. To spur this on, all it took was an exogenous shock to Yen exchange rates, which by the way had to revalue relative to the dollar given that the U.S. consumer is tapped out and the U.S. had to drop its rates. No fancy conspiracy needed. All that is needed is self-interest, large short term private payoffs combined costs that can be socialized, along with a refusal to accept some natural economic laws. The long term implications of course are unsustainable, but Fukui isn't going to worry about that for now. He's got other concerns to attend to.

 

[LTVibe]

This isn't the first time Honda and the Japanese government ( MITI ) have had a dispute:

Honda Versus the Ministry of International Trade and Industry

Quote:
...back in the 1970's MITI "ordered" Honda (the motorcycle maker) not to get into the car business.

 

[XS650]

Originally Posted By: digitalSniperX1
Africa might be on the list if the region wasn't rife with political/social instability.



Except for South Africa (which already builds cars) it doesn't have the infrastructure or stable workforce needed to build cars.

I know people who tried to set up co-manufacturing in Egypt, one of the relatively stable and advanced countries of Africa (oxymoron alert) and it was a nightmare. The political/social instability you mentioned plus unreliable work force and lack of reliable infrastructure.

India with all it's problems would be a better bet if you could get their bureaucracy under control.

 

[lovcom]

Originally Posted By: VeeDubb
Originally Posted By: LTVibe



Quote:
Well, after slicing and dicing his company's profit forecast, Honda's CEO, Takeo Fukui, has had just about enough. He's asking the government to help weaken the yen--or else:

"If we go beyond (100 yen), we would simply have to transfer more production overseas, cut more temporary workers and even start laying off permanent jobs," he said.

"Beyond that we could switch to importing more cars into Japan, bring research and development facilities overseas, and in an extreme scenario move our headquarters offshore. It would cause nothing short of a hollowing out of Japanese industry."

Note to Gary: See, another example of a power broker getting ready to screw his own people even in the absence of conspiracies. Why? Because Fukui knows that the big pay day isn't going to come from keeping Japanese workers employed - its going to come when he beats quarterly earnings estimates and Honda shares go up. To spur this on, all it took was an exogenous shock to Yen exchange rates, which by the way had to revalue relative to the dollar given that the U.S. consumer is tapped out and the U.S. had to drop its rates. No fancy conspiracy needed. All that is needed is self-interest, large short term private payoffs combined costs that can be socialized, along with a refusal to accept some natural economic laws. The long term implications of course are unsustainable, but Fukui isn't going to worry about that for now. He's got other concerns to attend to.


Before you demonize Honda, did you ever consider that it is the Japanese govnerment with their stupid laws that compel Japanese companies to leave the country?

And it's been going on here in the USA for years now too, so this is nothing new.

This is not a one-sided issue as you portray!

 

[JHZR2]

I wonder if Honda will go from loved company to "one of the big three" when it moves to the US

Looks like theyre just looking into making the same decision that we have been making here for years.

 

[Steve S]

Originally Posted By: JHZR2
I wonder if Honda will go from loved company to "one of the big three" when it moves to the US

Looks like theyre just looking into making the same decision that we have been making here for years.

Most impressive !!! I guess once you are established then all there is left is to maximize profit on the quality of your reputation. Like Mercedes Benz has done for years.

 

[Ben99GT]

Originally Posted By: digitalSniperX1
IIRC, they've considered moving to the US once before...


That would be very interesting...

 

[Kestas]

Two thoughts --

- Hello Honda, welcome to our world. All this rosy talk of auto workers having a job for life, kanban system of supply, loyalty, and government help to the automotive industry is finally come to an end.

- What is Honda's hidden agenda? It sounds like there's something brewing underneath.

 

[opus1]

If Honda becomes a US company and sticks a diesel in the Accord, I'd definitely consider cutting up my GM card......

 

[Shannow]

Originally Posted By: Kestas
- What is Honda's hidden agenda? It sounds like there's something brewing underneath.


Mitsubishi spent a decade threatening to close it's plant and lose 1,000 jobs. Each time, the Govt would give them some tax relief/handout.

Probably just trying to get their slice of the global handout.

Wheel that doesn't squeak gets no grease so to say.

 

[MillerMan]

yep trying to build cars in Egypt is/would be nightmare:

What you get is low productivity, rather poor quality. Plus never do today, what can be done tomorrow (bookra) or let’s do it next week instead, next week it’s the same let’s do it next week instead it’s too much work now

Your factory is shut down because your out of parts, where are the parts? In the country somewhere, lost, delivered to the wrong place, just sitting at the ship dock for the last week because nobody cares or forgotten about. Or still at the dock because somebody wants to get a payout bribe first.

Oh it gets worse than that…………………………….


Originally Posted By: XS650
Originally Posted By: digitalSniperX1
Africa might be on the list if the region wasn't rife with political/social instability.



Except for South Africa (which already builds cars) it doesn't have the infrastructure or stable workforce needed to build cars.

I know people who tried to set up co-manufacturing in Egypt, one of the relatively stable and advanced countries of Africa (oxymoron alert) and it was a nightmare. The political/social instability you mentioned plus unreliable work force and lack of reliable infrastructure.

India with all it's problems would be a better bet if you could get their bureaucracy under control.

 

[Dave Hess]

Honda can move to Mexico.
That way they can build their high quality cars and use a much more motivated workforce, not to mention no UAW to deal with.

 

[pbm]

yep trying to build cars in Egypt is/would be nightmare:

Quote
"What you get is low productivity, rather poor quality. Plus never do today, what can be done tomorrow (bookra) or let’s do it next week instead, next week it’s the same let’s do it next week instead it’s too much work now

Your factory is shut down because your out of parts, where are the parts? In the country somewhere, lost, delivered to the wrong place, just sitting at the ship dock for the last week because nobody cares or forgotten about. Or still at the dock because somebody wants to get a payout bribe first."

Oh it gets worse than that…………………………….



It's called "cultural impediments". We now have them in America due to our quest for 'multiculturism'.

 

[digitalSniperX1]

Honestly, I was kinda joking (bad joke I know). There is no way in 7734 that Honda would move their operations to Africa now or in the foreseeable future.